Most acoustic guitars will require a neck reset at some point .  There are various factors that contribute to the problem, but a neck reset is generally in order if the saddle has been taken down to a very low height but the action of the guitar is still high or uncomfortable.  The low saddle/high action condition is usually indicative of a poor neck angle. It's important to make a distinction here between neck angle and neck relief.  Neck relief refers to the slight forward "bow" seen in a neck that is under tension of strings.  Proper relief in a neck is part of a good set up.  Over-relief (too much forward bow) can lead to high action, but is not addressed by resetting the neck.  In a neck with an adjustable truss rod, over-relief can be corrected by adjusting the tension on the truss rod.  In a neck without an adjustable rod over relief can be addressed through compression fretting or other means. But neck relief issues are not addressed with a neck reset, a poor neck angle is.

The appropriateness of the neck angle on a typical flat top acoustic guitar is determined by the following process in the shop.  The strings and saddle are removed from the guitar.  With the strings and saddle removed, a special straight edge is laid on the fretboard at the nut and extended over the face of the guitar past the bridge.  The straight edge has relieved slots to allow clearance for the frets, so that the edge can rest directly on the fretboard.  On a guitar with an ideal neck angle, the straightedge will lay FLAT on the fretboard and extend over the bridge, just touching the bridge top.  In a guitar with an underset neck the straightedge will contact the bridge and leave a gap between the straightedge and the fretboard, indicating that the neck needs to be set "back".  This is the more common circumstance leading to a neck set.  On a guitar with an overset neck, the straightedge will lay flat on the fretboard but overshoot the bridge, clearing the top of the bridge with a gap beneath.

This article follows the neck reset on a 1935 Martin 000-18 which required a neck set due to very high action and low saddle.  This article attempts to give a general overview of the process, and is by no means exhaustive in it's discussion of the subject. Fortunately, no one had ever cut down the bridge on this guitar (a common stop-gap "repair" on guitars with high action but no saddle left) so no work was necessary to undo old mistakes.

 
Before the neck can be removed from the guitar the fretboard extension must be loosened from the top.  The fretboard extension is heated, by the use of a travel iron or heat lamp, taking great care not to heat the finish.  The top is masked of by thick templates that disperse the heat and prevent the heat from harming the finish on the top along the fretboard edges.
After the heat source is removed, the 15th fret is pulled from it's slot to facilitate entry into the dovetail joint.  On Martin guitars there is a gap in the front of the dovetail joint of about 1/8" that falls just beneath the 15th fret on a 14 fretter, and the 13th fret on a 12 fretter.  This gap will be used to introduce steam later in the operation.  The fret is pulled carefully with a pair of end nippers ground flush on the end.  The addition of heat minimizes the edge grain tear out of the fretboard when removing the fret, and care must be taken to avoid tearing out the edges of the fret slot.
After removing the 15th fret, and with the fretboard extension still hot, a flat and flexible putty knife is edged under the corners of the fretboard.  If enough heat has been applied, the glue bond between the fretboard and the top will part with little resistance.  Care must be taken to make sure that you are parting the glue joint and not tearing through the spruce.  The spruce is soft and will want to tear away if there is any run out in the grain or if the glue joint is not adequately softened.  If  any significant resistance is met, I stop and re-apply heat to the area.  Work continues in this manner until the fretboard is loosened from the top,  from it's end to just beneath the 15th fret.  
Once the fretboard is loosened, a 5/64" hole is drilled straight down into the 15th fret slot.  Once through the fretboard the drill bit will fall directly into the gap in the dovetail. 
Now I'm ready to introduce steam into the joint.  The body of the guitar has been stuffed with rags near the neck block in order to absorb any seepage from the steam into the body in the area of the neck block (a common issue).  The steam is generated by a cappucino machine and directed through a bit of heavy rubber hose and a long (3" or so) steam needle clamped on the end.  This setup generates a LOT of steam and directs it aggressively.   For guitars assembled with hide glue the joint will come loose very quickly. For guitars assembled with Titebond or some other wood glues a little more time may be required.  I will allow the steam needle to "cook" in the joint for 30-45 seconds.  When I begin to see signs of moisture along the external edges of the heel it's time to attach the neck removal jig.
The neck removal jig, commercially available through Stewart MacDonald Guitar Shop Supply, applies direct pressure to the back of the heel and pushes the neck out of the dovetail.  I find this jig to be safer than the old "wobble" method of removing the neck, as it places no undue stress on the joint.  In addition, since the jig produces pressure directly to the back of the heel and pushes the dovetail apart there is little risk of damage to the heel or dovetail itself.  The 'wobble' method exposes the heel and dovetail to stresses that can cause damage such as a crack in the heel or edge chipping.  For example, if part of the dovetail is loose and part is not, the direct pressure of the jig is less likely to cause breakage in the joint than wobbling the neck and exerting force side to side.
Once the glue is sufficiently loose the jig will push the dovetail apart.  If any resistance is met or if it seems to take excessive pressure to separate the joint, I'll try adding a little more steam and repeat the process.  Care must be taken not to over steam the joint though, as introducing too much moisture can cause enough swelling in the joint to make separation difficult.  Generally speaking, once the slue is sufficiently loosened, the joint will come apart quite easily.
 After the neck is removed the old glue will be soft due to the heat and moisture.  All of the old glue should be cleaned up from the surfaces of  both the dovetail and the dovetail block to ensure proper bonding of the new glue when the neck is reattached.  Cleanup of the old, soft glue is easiest when it is still moist and warm.  A chisel will easily remove all the old glue residue.  Occasionally, the exposure of the fretboard extension to the heat and moisture used in neck removal will result in the tendency of the extension to curl slightly from the bottom.  Often I will clamp a flat block to the underside of the fretboard extension while the instrument sits overnight.  After the dovetail and the dovetail block have been given sufficient time to dry (overnight is good), the process of resetting the neck angle begins.
Resetting the neck requires that the dovetail be refit as well.  Since the dovetail was trimmed to fit when the neck was first attached to the guitar, a shim must be glued into the dovetail block to allow for refitting.  The thin veneer shim is glued to one side of the dovetail block using compressed foam packing material wedged into the joint to hold the shim flat and in place while the glue dries. 
The shim is now in place.  The dovetail will now be trimmed to allow for a proper fit.  I trim the dovetail so that the neck drops into the pocket to within about 1/16" of the final fit.  This is accomplished by dry fitting the dovetail to the block with a very thin sheet of carbon paper set in the joint on the side that has had the shim added.  Once the neck is removed from the dry fit, the carbon paper will have left markings on the dovetail that indicate the high spots. 
The carbon markings from the dry fit of the dovetail reveal the areas that must be shaved to improve the fit.  During this fitting, it is critical to remove wood ONLY from the side of the dovetail that will contact the shim in order to maintain proper alignment of the neck.  The carbon impressed high spots are hit selectively with the file, and then the dry fit process is repeated until the dovetail drops into the joint to within 1/16" of the final fit.
Once the refitting of the dovetail is within the 1/16" of the final fit, the angle of the neck can be set.  In this case, the neck needed to be angled back slightly to allow for a tall saddle and good action.  To accomplish this, material must be removed from the bearing face of the heel (the part of the heel that contacts the shoulders of the guitar).  Material is removed using a file, taking care to remove more toward the end of the heel and taper the removal to  virtually nothing at the fretboard end of the heel.  The result will be to tip the neck back slightly.  The heel must be filed equally on both sides of the dovetail in order to maintain proper alignment of the neck.  This process is done in very small increments and checked frequently (using the notched straight edge) for angle and alignment until the  angle is correct.  How much material is removed before rechecking the angle is a matter of  feel and experience.  There is a formula of sorts for how much material can be removed from the back of the heel in order to achieve a certain predictable result in terms of saddle height but I know few luthiers who use it.  Most rely on their experience and feel, and work in very small increments, checking the new neck angle frequently as they go.
During the fitting process the angle is checked with the notched straight edge as described in the beginning of the article.  Once the angle is correct (the straightedge rests flat on the fretboard while extending over the bridge and just touching the top of the bridge)   the neck is ready to be attached to the body.  Because material has been removed from the face of the heel the dovetail now draws the neck in a little more than before, and the last 1/16" of space left in fitting the joint is accounted for, and the neck is now properly seated.  If it is not  completely seated in the dovetail pocket the last minor adjustment to ensure a proper fit is made now.
(Another view of the straightedge, showing the edge laying flat on the fretboard  and extended over the top of the bridge, indicating proper neck angle).
The neck is now reattached.  I use Titebond generally for neck resets.  Some luthiers prefer hide glue for this operation.  Whatever glue is used the key idea is reversibility.  The repair should be done with a glue that allows for later dis-assembly if necessary.  The fingerboard clamping caul is radiused to match the curve of the board and also relieved for the frets.  The caul on the inside of the guitar (beneath the fretboard extension) is also relieved to clear the bracing on the inside of the top.
After the guitar sits overnight under clamping  pressure and some minor cleanup work is done, the instrument is ready to be set up. Once the proper neck angle has been re-established the guitar can be set up to play with good action and a higher saddle than before the neck reset.  

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